Shopclues in talks with bankers for possible public listing; eyes $75M-$100M in pre-IPO round

Online marketplace Shopclues has begun discussions with merchant banks for a possible public share sale, a development that’s taking place while the company’s cofounders are engaged in a dispute among themselves.Biswarup Gooptu | ET Bureau | Updated: March 24, 2017, 00:01 IST

Online marketplace Shopclues has begun discussions with merchant banks for a possible public share sale, a development that’s taking place while the company’s co-founders are engaged in a dispute among themselves.

The Gurgaon-based company, which was catapulted into the unicorn club in January last year with a valuation exceeding $1 billion, has held talks with investment banks including Goldman Sachs and Credit Suisse, according to two people with direct knowledge of the plan. The mandate may be finalised over the next three to four months.

At least two investment banks expect to be the lead book runners for the issue, which is likely to take place in the first quarter of financial year 2018-19. Shopclues spokespersons declined to comment on the matter.

The company’s management, led by cofounders Sanjay Sethi and Radhika Aggarwal, have been involved in an acrimonious dispute with founder and former chief executive officer Sandeep Aggarwal, who accused the duo of illegally taking away his voting rights.

Sethi and Radhika Aggarwal denied the charges and have the backing of the company’s board. The three are currently battling it out in the courts.

Shopclues, owned and operated by Clues Network Pvt Ltd., the Indian unit of US-based Clues Network Inc., is also looking to raise a fresh round of funding, estimated at between $75 million and $100 million, a transaction that’s expected to be a mix of primary and secondary components.

The online marketplace, which was reported to have raised $110-$140 million in January last year at a valuation of about $1.1 billion, counts Nexus Venture Partners, Tiger Global, GIC (the sovereign fund of the government of Singapore), and Ronnie Screwvala, founder of Unilazer Ventures, among its investors.

According to multiple sources, Nexus Venture holds the largest stake in Shopclues, estimated at about 24%, followed by Tiger Global, which has a 22% stake. Helion Venture Partners owns about 13%, while Screwvala and GIC own 5% each.

Sandeep Aggarwal, who is the founder and chief executive of online marketplace for automobiles and auto services, Droom, is believed to own about 12% stake in Shopclues, with Sethi and Radhika Aggarwal holding 2% each in the company. However, the company has declined to confirm the cap table, when asked by ET.

Shopclues is expected to list on the Nasdaq and will be the first big share sale by an Indian ecommerce firm since Infibeam went public in April. Only three other Indian internet companies have opted for initial public offers over the past decade - Info Edge in 2006, MakeMyTrip in 2010, and JustDial in 2013.

Flipkart, India’s largest online marketplace, has declared its intention to go for an IPO, although it hasn’t specified when.

Shopclues more than doubled revenue to Rs 179 crore in the financial year ended March 31, 2016, while losses widened to Rs 383 crore.